Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.
Bloomin’ Brands Inc (NASDAQ:BLMN) shareholders have witnessed a decrease in activity from the world’s largest hedge funds of late. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Pegasystems Inc. (NASDAQ:PEGA), Pinnacle Financial Partners (NASDAQ:PNFP), and Monro Muffler Brake Inc (NASDAQ:MNRO) to gather more data points.
Follow Bloomin' Brands Inc. (NASDAQ:BLMN)
Follow Bloomin' Brands Inc. (NASDAQ:BLMN)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Keeping this in mind, let’s view the fresh action surrounding Bloomin’ Brands Inc (NASDAQ:BLMN).
How are hedge funds trading Bloomin’ Brands Inc (NASDAQ:BLMN)?
At Q3’s end, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -9% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, D E Shaw, managed by D. E. Shaw, holds the biggest position in Bloomin’ Brands Inc (NASDAQ:BLMN). D E Shaw has a $47 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by Two Sigma Advisors, led by John Overdeck and David Siegel, holding a $9.6 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other members of the smart money that hold long positions consist of Ken Griffin’s Citadel Investment Group, Charles Paquelet’s Skylands Capital and Steve Cohen’s Point72 Asset Management.
Seeing as Bloomin’ Brands Inc (NASDAQ:BLMN) has experienced a decline in interest from the smart money, it’s easy to see that there exists a select few funds that elected to cut their positions entirely by the end of the third quarter. At the top of the heap, Thomas E. Claugus’s GMT Capital dumped the biggest stake of the 700 funds monitored by Insider Monkey, totaling close to $13 million in stock. Bruce Kovner’s fund, Caxton Associates LP, also sold off its stock, about $11.1 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 2 funds by the end of the third quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Bloomin’ Brands Inc (NASDAQ:BLMN) but similarly valued. These stocks are Pegasystems Inc. (NASDAQ:PEGA), Pinnacle Financial Partners (NASDAQ:PNFP), Monro Muffler Brake Inc (NASDAQ:MNRO), and Sterling Bancorp (NYSE:STL). This group of stocks’ market caps resemble BLMN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PEGA | 16 | 223417 | -4 |
| PNFP | 10 | 21950 | 5 |
| MNRO | 13 | 216304 | 0 |
| STL | 13 | 77719 | 4 |
As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $135 million. That figure was $104 million in BLMN’s case. Pegasystems Inc. (NASDAQ:PEGA) is the most popular stock in this table. On the other hand Pinnacle Financial Partners (NASDAQ:PNFP) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Bloomin’ Brands Inc (NASDAQ:BLMN) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
